1.      There are substantial objections to many of the proposals in the consultation paper.  They need to be taken seriously because they not only raise issues as to the workability of the proposals, but also as to fundamental philosophical and political objections to them.

2.      If pushed through, there is likely to be a significant political cost.  Many natural Lib Dem voters will be perturbed by the illiberal nature of the proposals and they will, frankly, not work and will be directly resisted by the profession.  The widespread perception in the profession is that they are not survivable.

3.      The irony is that there are alternative proposals which could more that meet the funding gap – if it exists[1] - and could, in the long term, form part of a more rational and sustainable system.

4.      I appreciate that these proposals are in line with MoJ long term thinking.  But they are badly thought out and directly out of line with current thinking on competition, and party policy on SMEs, BMEs and legal aid itself.

5.      The select committee has identified ( and lamented ) the breakdown in trust between the profession and the ministry.  We are seen as producer interests and our views are discounted.  There needs to be, in my view, a thorough re-examination of how what currently falls under legal aid is funded, but it needs to be one in which the profession is fully engaged AND valued as a source of expertise.  The ridiculous time scale of the consultation paper, and the nature of many of its proposals, precludes this.  What I am suggesting is a way forward.  It is in nobody’s interest:

a.       For proposals to be driven through which run the risk of causing serious and irreperable damage to the profession and thus to the supply of legal services to the citizen;

b.      For there to be repeated periodic crises when public finances are under strain and legal aid is targeted, yet again, for a reduction.

6.      We need, in short, a new settlement which will cut this Gordian knot.

7.      It is clear that no proper modelling has been done and that the risk assessments are superficial.  The proponents of both PCT and significant further cuts simply have no real idea of their effect in practice.  For a core public responsibility, this is bordering on recklessness.


8.      There are difficulties and weaknesses which simply have not been thought through adequately.  They apply not only to the details of the scheme, but also to the principles.


a.       For the scheme to guarantee volumes of work, client choice has to be removed.  We don’t need to look to HRA for the right to choose one’s own lawyer: it’s a common law right and one of our essential freedoms.  If Blair had tried to introduce such a measure, we would have fought it tooth and nail, and rightly;

b.      Although the paper suggests that it would be “introducing competition,” the reality is the diametric opposite.  What is proposed is a highly bureaucratic process which would limit competition and remove any drivers to quality.  Why?

                                                               i.      Competition would only occur at the bidding point.  There would thereafter be a fixed period where a work stream was guaranteed.  There would be no ongoing competition to promote quality.  Contrast with policy in relation to choice as a driver of quality elsewhere ( eg NHS );

                                                             ii.      For reasons which I will set out, it is highly likely that many high street solicitors will not survive.  Thus, when the contracts expire, the available competition will have largely disappeared;

                                                           iii.      The history of quality clauses in contracts does not inspire confidence: there is no history of success of this in public procurement;

c.       The Law Society has, apparently, taken the PCT scheme to the banks.  They do not see it as a proposition upon which they would wish to lend.  How could SMEs acquire the capital to bid?

d.      I am afraid to say that I entertain no confidence that the MoJ itself, or the LAA, could be trusted to carry such a policy out successfully.  Its record in procurement is particularly bad.  The translation services pale into insignificance, in terms of scale, with legal aid PCT.  Do ministers really want the inevitable toxic fall out if, as I suggest, it can be avoided?


a.        The period of three years is insufficient, for the purposes of raising capital, yet a longer scheme will aggravate the competition problems identified above;

b.      The alleged economies of scale are not only not demonstrated, but highly unlikely.  For a supplier to cover the whole of Lancashire        ( to give a local example with which I am familiar ) with the distances between courts and police stations will require employment of extra lawyers and the occupation of extra offices;

c.       An individual charged with a number of offences will have a number of different solicitors;

d.      The influence of a trusted solicitor, who has acted for an individual for a number of years, cannot be over-estimated.  The individuals involved will often be vulnerable, have mental health issues or limitations, and difficult to deal with.  Their families often will have a relationship with the solicitor which assists in persuading the individual to admit his guilt, if guilty.  If we assume, for the sake of argument, that 1 in 10 cases which might have been pleas, with a trusted adviser, go on to trial, the cost would be substantial;

e.       The maximum bid level, at a minimum discount of 17.5%, represents a reduction of 30.5% since 2004, excluding inflation.  There is no assessment as to whether this is sustainable.

11.  Generally, high street firms have had, in the past year, to cope with:

a.       The reductions in criminal fees;

b.      The taking out of legal aid of much family work;

c.       Significant limitations on success fees.

12.  There is no work on the effects of these reductions in income.  If such firms are excluded from criminal legal aid, there is a substantial risk that they will not be viable, even if further consolidation occurs ( there has already been much consolidation ), and that high street legal advice will disappear.  Combined with the reductions in law centres and CABs, the effect will be devastating.  Of course, Tory friends in the city do not use such firms and will be insulated form the effects. It is the ordinary citizen who will be affected.


13.  There are assumptions underlying the proposals which are truly shocking and will lead to huge opprobrium in the country once they are understood.  Furthermore, the cuts run a serious risk of making practice in criminal law unsustainable. 

14.  The state brings a charge against an individual.  It the gives a financial inducement for that individual’s lawyer either to persuade him to plead guilty or to shorten his trial.  To argue that lawyers’ professionalism would preclude them being driven by financial motive is simply no answer:

a.       The whole purpose of the proposals in relation to fees is to incentivise “ efficient” disposal of cases.  If it is not assumed that economic motives will drive a different approach, there is absolutely no rationale for the proposed changes in the structure of the graduated fee scheme;

b.      Rules which are aimed at avoiding conflicts of interest are designed to protect the client from being in a situation where his interests clash with those of his lawyer.  If the do clash, or are perceived to clash, what confidence can he have that the advice which he is receiving is appropriate?  It goes to the heart of the relationship.

15.  The proposed tapering of fees in long cases reduces them to levels far below the equivalent minimum wage rate.  Not only is this outrageous per se, but it is also predicated upon the entirely false assumption that the driver of the length of a case is the defence advocate.  In fact, the defence advocate probably has less effect upon the length of the case than any other party: it’s the prosecution which chooses which charges to lay and the evidence to be called in support.  Problems with jurors, the production of prisoners at court, unavailability of witnesses, repeated listing of other cases during the currency of the trial etc are all outside the control of the defence advocate.

16.  The proposal to cut rates for senior practitioners and give some small additional contribution to young advocates sounds reasonable, but, in reality, is damaging.  The Carter reforms did this some years ago.   The result is that:

a.       Senior advocates with experience ( and experience shortens    cases ) have already had a disproportionate hit on their incomes.  There is no incentive to take on the more difficult cases.

b.      There is no hope of career progression.  What would attract a promising young candidate to enter this field of law?


17.  VHCC fees have already suffered an effective cut of 38% since 2004, PLUS inflation.  These are, by their very nature, complex cases requiring specialised knowledge and experience.  Their present rates are barely sustainable.  I presently do, as a matter of conscience, one legal aid case a year.  I would not work at the proposed rates and I doubt that any experienced barrister worth employing would do so.

18.  The impact assessment recognises the risk ( and it is a very serious risk ) that experienced lawyers will be driven away from this work.  It makes a bland assumption that less experienced lawyers will be able to provide an adequate service.  It entirely begs the question: why would they wish to take on complex work which is so badly paid?

19.  The VHCC scheme is bureaucratic and unwieldly.  I do not think that anyone would be sad to see its disappearance, but any alternative arrangements MUST recognise the extra responsibility and weight of these cases.

20.  There is a long term obsession at the MoJ to cut down the use of two counsel in cases.  It is quite misplaced and betrays a lack of understanding of the dynamics of difficult cases.  It also betrays a distrust of the judiciary which reflects badly on the department.

21.  The use of more than one counsel is already significantly regulated and the test which must be met is a stringent one.  The decision for the granting of a certificate for two counsel is one for the judge and he cannot grant a certificate unless he is of the opinion that a number of criteria are met and that the defendant could not be adequately represented by one counsel alone.

22.  The application is normally made to the senior resident judge or the trial judge.  The judge has to fill in a form to justify the granting of the certificate.

23.  Given that the certificates for two counsel can only be granted where, in the absence of such a certificate, the defendant cannot be adequately represented, there can be no basis for a different test.  Is it the MoJ’s proposal that client’s should be inadequately represented?

24.  The use of two counsel saves significant amounts of court time.  There are many tasks in these cases which have to be carried out to ensure that the trial can run smoothly.  Whilst the trial is proceeding in court, the juniors will often be negotiating admissions ( saving the calling of witnesses ), editing of interviews and suchlike.  The ability to share the workload is invaluable.  The present rules allow the judges to identify the cases where these arguments hold and are relevant.  The judges have far more experience than civil servants and should not be second guessed.

25.  The overall downside is significant.   It is not good enough simply to blandly state that the number of providers will be reduced by 75%.  Provision of legal services to the average citizen is predominantly through high street solicitors.  The system works well.  Through the solicitors, clients can have access to the most specialised barristers at low cost.  They can access advice locally, from solicitors who know their locality and local courts.  They tend to be substantially cheaper that the larger commercial solicitors, who will not be touched by these proposals.

26.  For many of these solicitors, viability has depended, to a degree, upon a mix of work.  The average citizen is likely to come across the legal system in relation to: conveyancing; family breakdown; personal injuries; housing; criminal law.  In respect of each area, previous cuts have made practice very difficult.

27.  The majority of these firms will constitute SMEs.  The policy of the government is to promote such enterprises.  The proposed cuts alone, even without PCT, are likely to make many of these firms unsustainable.  The consequences are obvious: loss of provision and added social costs through unemployment etc.

28.  Furthermore, many of the services provided to ethnic minority communities are provided via small, ethnic minority firms.  They are close to their communities and an essential bridge between them and the UK legal system.  The capacity of these firms to bid under PCT must be viewed as doubtful.  There will therefore be a disproportionate adverse effect upon minority communities and the lawyers who serve them.  This effect was identified in work commissioned from Otterburn Consulting by the Lord Chancellor’s Dept in relation to similar proposals mooted by Carter and adopted by the Select Committee.

29.  The author of the Consultation paper, in making assumptions as to the effect of further cuts, appears to be unaware of the profit margins discovered by the NAO, which are set out in the Appendix.  These make it absolutely clear that the proposed fee levels are simply unsustainable.  They also make it clear that the suggested economies of scale are imaginary: profitability dropped sharply the larger the supplier.

I hope that it can be seen from the above critique that the proposals are not well thought out and are likely to be damaging, both in their effect and politically.  They would not present a legacy for the LibDem involvement in the coalition which would recruit a single extra member.  Rather, the converse.

Having said that, I acknowledge that savings have to be made.  In my view, the far better option is to look at alternative sources of funding. This is likely to be far less damaging.

.  In terms of positive recommendations, I would point to:

a)     Allowing a greater use of restrained funds to cover defendant’s costs.  The current system and the government proposed amendment throw costs unnecessarily upon the legal aid fund.

b)     Doing away with the proposed requirement that legal aid must have been applied for before a defendant’s costs order can be made.  The requirement is unnecessary and likely to reduce the amount saved by the financial limit in relation to legal aid entitlement.  Why encourage people to apply for legal aid when the maximum recovery under a defendant’s costs order would be limited to legal aid rates in any event?  It merely adds costs and, of course, some may end up being granted legal aid in any event.

The cost of fraud trials is a significant proportion of the costs of the VHCC scheme.  It is a fact that most significant frauds involve limited companies, whether as the vehicle for the fraud or as an integral part of it.  The proposal is that companies should be required to take out insurance cover, to cover the costs of defending any fraud charges brought which arise out of, or significantly involve, the company.  The cover would be for the directors and officers of the company, including those acting as shadow directors.

 It is commonplace for insurance to be compulsory in relation to various aspects of the operations of a company: employee liability; health and safety liability to third parties.  The policies include the costs of defending criminal charges.  D&O policies are available in the market.  Their current weakness is that the insurers sometimes seek to avoid the policy on the basis of non-disclosure ( i.e., of the fraud itself ).  Compulsory policies would render such avoidance impossible.

 The advantages of this proposal:

i)                   The costs saved by the legal aid fund would be likely to exceed the sum which the present proposals aim to save, given the current VHCC spend of £592m;

ii)                 The “polluter pays” principle would be engaged;

iii)               The legislation could be introduced and brought into effect quickly.  The severe risks posed by the proposals in the Consultation Paper could be avoided.


These proposals are an existential threat to the profession and its clients.  I cannot exaggerate the damage which they are likely to do.  They can be avoided by constructive and intelligent engagement with the profession.

I hope that this has been of assistance.  It is, of necessity, somewhat compressed and does not deal with all of the issues.  I have submitted a full response.  It identifies concerns about the performance of the MoJ which are widespread.  It is time for a new approach and a new settlement.


                                                                                    Alistair Webster




1.      The aim of the proposals is to save £220m by 2018-9.  The baseline appear to be the spend on criminal legal aid of a suggested £1.08bn.[2]  However, that figure will not include the effect of many of the recent cuts, particularly those relating to VHCC and fraud cases.  These cases have a long lead time and the reality is that the actual spend will be significantly lower.

2.      The figure in the Legal Aid Agency’s business plan for 2013/12 may be seen as more reliable.  It expects to spend £941m in total on legal aid in 2013-14.  This demonstrates, self evidently, that a substantial part of the savings which are aimed for will be made even if no further cuts are imposed.

3.      Indeed, the LAA’s figure for “ crime higher” costs are £100m lower than the 2011-12 figure set out in the Consultation Paper.

4.      The reality is that criminal legal aid costs have been significantly reduced  over the past decade: there is no question of them spiralling out of control.

5.      Indeed, in its 2009 report” The procurement of Criminal Legal Aid in England and Wales by the LSC, the NAO stated, at para 1.3 of its report, that between 2004 and 2009, criminal legal aid spending had fallen by 12% in real terms.  This is before the intervening extra 13% cuts.

6.       It simply cannot be argued, therefore, that spending on criminal legal aid is in any way out of control.

7.      At para 1.13 of the NAO report, profitability levels were reported thus: “Our survey included self-reporting questions on firms’ criminal legal aid profit. Profit is understood as meaning before notional salaries, interest on partner capital and notional rent are excluded. On average, firms reported that criminal legal aid accounted for almost 60 per cent of turnover. Firms reported an average profit margin of 18.4 per cent in the last financial year, a fall from 21.6 per cent three years ago. They reported a wide range of profits from criminal legal aid, with 16 per cent of firms reporting no profit in the last financial year, and 37 per cent reporting profits above 20 per cent.

8.      Those headline figures conceal a finding which completely undermines the PCT assumption as to economies of scale.  The larger the supplier, the lower the profit margin.  Whilst all sizes of supplier had seen declining profitability, the larger suppliers reported significantly lower profit margins.  Sole practitioners had the highest margins, with rates for larger practices ( before the recent cuts at ): 6-12 solicitors: 12%; 13-40 solictors: 11%; 41 plus solicitors: 7%.[3]


[1] Please refer to appendix, where consideration is given to the figures in the Consultation Paper, which may well be misleading.

[2] Consultation paper, Annexe F

[3] NAO survey of solicitor’s firms, figure 29.